European Benzene Market: Weak Demand and Oversupply Continue to Weigh on Prices

Recently, the European benzene market has remained trapped in a weak fundamental state. Companies across the benzene and its derivatives value chain are still facing the dual pressures of structural demand weakness and local oversupply. Geopolitical tensions and fluctuating trade dynamics in 2025 are putting further strain on the market. In addition, the ongoing domestic supply-demand imbalance has exacerbated the uncertainty surrounding the market's outlook.

Oversupply Dominates the Market of Benzene

Due to the continued downturn in Europe's automotive and construction sectors, weak demand for benzene feedstock has become the dominant theme for the market in 2025. The annual procurement of key derivatives such as isopropylbenzene, styrene, and cyclohexane has been consistently shrinking. While producers have adjusted their operating rates along the value chain to counter fluctuations in downstream imports and attempt to reduce supply, benzene supply in the European market remains abundant.

The persistent oversupply has suppressed prices, keeping benzene at low levels throughout the year. As of August 15, Platts, a S&P Global Commodity Insights service, reported that the European benzene spot price for Amsterdam-Rotterdam-Antwerp (ARA) was $763.95 per ton, a 19% decline from the second half of 2024 and a 27% decrease compared to the 2024 average price. The low price in August further worsened the economic viability of benzene production, leading to a slight tightening of local supply.

Ongoing Trade Disruptions

Despite the market's oversupply, fluctuations in crude oil prices triggered by the Russia-Ukraine conflict and tensions in the Middle East, along with the impact of U.S. tariffs, have caused significant volatility in the European benzene market.

The imposition of a 15% tariff on EU products by the U.S. has further exacerbated the oversupply of benzene in Europe. The narrowing of the transatlantic price spread has made exports unprofitable. Additionally, long delivery cycles and unpredictable trade policy changes have made it increasingly difficult for European sellers to ship benzene overseas.

Current data indicates that, at present, Europe's benzene exports to the U.S. are incurring losses of $5 to $15 per ton. Industry experts expect the ripple effects of the tariff policy to continue impacting global benzene trade, leaving limited arbitrage opportunities for Europe. "The traditional export model of benzene from Europe to the U.S. and styrene from the U.S. to Europe is unlikely to continue in the short term," noted one producer. "Benzene prices need to adjust in both directions: the U.S. must increase, while Europe must decrease."

A Clouded Outlook

Under the dual pressures of geopolitical instability and Europe's ongoing chemical sector weakness, market participants are holding a pessimistic view of the benzene market's future. Most experts do not expect any significant improvement in the fourth quarter of this year, with the focus shifting to 2026.

Although the closure of the U.S. import arbitrage window could temporarily boost styrene operating rates, increasing demand for benzene feedstock, the persistent weakness in Europe's automotive and construction sectors makes a recovery in related chemical products highly unlikely. This trend has continued as the dominant theme in the market throughout the first half of the year. "The market is hoping for a demand recovery in September, but most participants remain cautious. Spring spot demand already showed signs of fatigue, and there have been no substantial signs of improvement in market demand," stated a distributor.

As oversupply continues to dominate the market fundamentals, factors such as the ongoing Middle East conflict, uncertainty in U.S. trade policies, and increasing competition from China's styrene and its derivatives in the European export market could cause continued price fluctuations in the European benzene market.

Looking ahead, industry professionals will continue to monitor the process of capacity adjustments in Europe. The general consensus in the market is that only a further reduction in steam cracker capacities will drive a market recovery. However, the real impact of capacity closures may not be seen for several years. "From a fundamental perspective, there are no significant positive developments on the demand side. Until substantial capacity consolidation is achieved, the European benzene market is expected to remain in an oversupply situation," said a trader.